REPLAY |DE | Monthly | Upcoming Employment Conference Call (Fri.) | Labor Market in December—How Fast Approaching “Full Employment?” – 1/7/2022

Posted January 7, 2022 by rvillareal

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The Labor Market has been powerfully strong recently and the Unemployment Rate has plummeted, at a relatively low 4.2% compared with 5.9% in June and the high of 14.4% in April 2020.  The current rate is not far from “Full Employment” as now defined by the Federal Reserve—3.5% (50-year low Feb. 2020) and some qualitative qualifiers.

Did the Labor Market keep heading toward Full Employment in December?  Is a tightening labor market bringing rising wage cost inflation, a significant price inflation risk, and as such a risk of tighter Fed policy than currently envisioned?

• Labor Market in Dec.—Strong or Very Strong; Mixed; Weak
  • Jobs (Nonfarm Payrolls); Unemployment Rate (%); Demand and Supply of Labor, Persons (Hh. Survey); Wage Inflation (Avg. Hrly. Earnings)
  • Worker Shortages Still or Out-of-Work Persons Coming Back?  COVID Effects
• Full Employment Parameters and Status
  • Unemployment Rate (New, 3-1/2%) (Old, Accelerating Inflation)
  • Demographic Criteria
• “Boomy Expansion” (Odds 75%)—Strongest Economy in Decades fed by Massive Policy Stimulus and Now Business Cycle Dynamics
• Inflation and Unemployment—Phillips Curve Back?
• Fed Prospect and DE Fed Scenario—Interest Rates Rising Sooner and More Than Before
• Financial Markets—Short- and Longer-Run
  • Interest Rate Outlook—Bear Fixed Income Markets
  • Equity Market Prospects—Bull Equity Markets